Foreign Direct Investment Granger and Nigerian Growth

Eravwoke Kester Erhieyovwe, Eshanake Samuel Jimoh

Abstract


Foreign Direct Investment has become a key driver of Economic growth and development among developing and developed countries. Consequently, the clamor for Foreign Direct Investment for developing and developed countries is expected. In this paper, we assessed the direction of causality between foreign direct investment and Economic growth in Nigeria. An exploratory research design that involves a combination of ordinary Least Squares (OLS), Augmented Dickey Fuller (ADF) unit root test, and the Granger causality test to test if Foreign direct investment granger cause Economic growth in Nigeria. We found that Economic growth (GDP) Does not granger cause Foreign Direct Investment (FDI) in Nigeria. However we suggests that the government must appreciate the basic element of successful development strategy and encourage domestic investors before going after foreign investors considering the fact that they constitute the bulk of Investment activities in the economy.

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